The energy industry’s keenness to take on new North Sea assets will become clearer next week when the North Sea Transition Authority (NSTA) announces the bids submitted for the latest round of offshore exploration licences – the first in three years.
Tax hikes earlier last year raised hurdle rates for new projects, on top of adding a dose of uncertainty for operators. Furthermore, the industry has largely shied away from major exploration campaigns in recent years, preferring to add production through wells in existing fields. This is more likely to be successful but means new fields are unlikely to be discovered.
But the cash is there for producers to bet big – profits have skyrocketed in the past 18 months as hydrocarbon prices shot up.